Entering out of pocket director expense (ltd co) in non-UK currency

Hi,
Using the DLA for out of pocket director expenses. (limited company)
For UK expenses this is easy, but
When a director has paid out of pocket expenses (eg hotel) in other currencies, eg Euros, what data should be entered into the purchase invoice that is created to be paid to the DLA?

  • One thought is to enter the expense in the original currency, and enter the value claimed in GBP by the director in the second line.
  • The other option is that the director has made their own assumptions about the conversion rate and doesn’t need to declare this to the company, and only claim a value in GBP. In the end the invoice from the original supplier will be in the original currency. It is the responsibility of the director to justify the claim.
    Is there a correct way to do this?

Also, once the expense has been paid back by the company to the director, does the company then own the original VAT receipt?

Thank you
Guillaume

Out of Pocket expenses for foreign currency items would work much the same as if it were in GBP. You can raise a purchase invoice in EUR for example and when it comes to logging the payment you can enter the amount considered paid in EUR and the GBP equivalent from the DLA.

The other thing you could do if you want to track separately is have different DLA accounts for different currencies. However I would stick with the first option to keep things simple.

If you’re on cash accounting and it’s a VAT receipt, your VAT return will pick this up when it has been paid originally, not when it is reimbursed to the director.

Thank you. Additional question: if the director paid in EUR, are they expected to enter the value in EUR in QF, and then the equivalent in GBP, or can they keep their separate calculation on the way the value in GBP was reached and only enter the value in GBP? (even when the VAT receipt is in EUR). Directors only have bank accounts in GBP.

  1. VAT Receipt → EUR
  2. Director pays with card in EUR.
  3. Director decides rule for conversion to GBP
  4. Director only enters value in GBP

or

  1. VAT Receipt → EUR
  2. Director pays with card in EUR.
  3. Director decides rule for conversion to GBP
  4. Director enters value in EUR in invoice receipt
  5. Director enters value paid to the DLA in EUR (from invoice), and also value paid in GBP (to their account)

Are both correct?

There shouldn’t be any problem recording the expense in GBP as long as you have the original EUR VAT receipt and you can record the relevant exchange rate somewhere. You may want to attach the EUR receipt scan to the purchase entry in QuickFile for your own record keeping.

Clear, thank you for this!

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